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Energy committee prepares proposals for govt

A special committee set up by the prime minister to advise the government on energy issues affecting ordinary citizens has prepared proposals on securing Hungary's gas supply, the electricity market, nuclear energy and renewable energy, György Vajda, who chairs the committee, said late on Tuesday.

The committee criticized the government's practice of setting unsustifiedly high mandatory prices at which power companies are required to purchase renewable energy. While it is necessary to subsidizing renewable energy, the current high mandatory prices squeeze cheaper conventional power companies out of the market and the additional cost is eventually passed on to the consumer. The committee suggested that the government limit its support of the renewable energy sector to secure the return of the initial investments. The committee discussed the long-term contracts signed at the time of the privatization of Hungary's regional electricity and gas distributors in the middle of the nineties and said it was time to review the volumes and prices set in these contracts.

In an assessment of the full deregulation of the electricity market from July 2007, the committee said the measure would have a negligible affect on the prices. The committee discussed gas price subsidies, but Vajda noted that the issue had been closed in November (when the revised subsidy taking effect at the start of 2007 was announced), therefore opinions and criticisms formed since then had not been debated. The committee did agree, however, that energy policy must be separated from social policy, though this is no easy task. The committee looked into government plans to extend the life of the Paks Nuclear Power Plant, Hungary's only nuclear power facility, as well as the construction of a new nuclear power plant when its lifespan reaches an end. The committee was one of three set up by the government to consider issues affecting citizens. The other two committees focused on issues in the banking sector and the trade sector. (Mti-Eco)